Lina Khan’s FTC: A Final Stand Against Big Tech?
As the tenure of Lina Khan as chair of the Federal Trade Commission (FTC) appears to be entering its twilight, she is still making headlines—and not in a quiet way. Recent reports indicate that Khan has approved a substantial request from Microsoft (MSFT) as part of an extensive antitrust probe. This investigation spans multiple facets, including cloud computing and artificial intelligence, areas in which Microsoft has become a formidable player, notably investing nearly $14 billion in OpenAI, the creator of the widely-discussed ChatGPT.
Khan, who has spearheaded aggressive litigation and investigation against major tech firms since her appointment by President Biden in 2021, is making sure her final actions resonate before a potential change in the political landscape with the upcoming inauguration of President-elect Donald Trump.
The FTC isn’t the only agency ramping up scrutiny in this crucial stretch. Rohit Chopra of the Consumer Financial Protection Bureau (CFPB) recently declared that the CFPB possesses supervisory authority over Google’s payment platform, Google Payment Corp. Such bold moves sparked an immediate lawsuit from Google’s parent company, Alphabet (GOOG, GOOGL), claiming numerous legal shortcomings in the CFPB’s assertions.
Elon Musk, an influential voice and advisor within the incoming Trump administration, has called for the elimination of the CFPB. The agency has certainly captured attention with its aggressive stance against financial tech firms, initiating multiple lawsuits and fines against companies alleged to have misled consumers.
A Partial Political Continuity?
Interestingly, these recent regulatory actions by the FTC and CFPB suggest a potential convergence between the Biden administration’s ongoing challenges to tech monopolies and the upcoming Trump administration’s approach. Trump’s planning hints that he isn’t inclined to give tech giants a free pass, as evidenced by his nomination of Gail Slater to lead the Department of Justice’s antitrust division. Slater’s appointment aligns with the aggressive stance taken by Khan, emphasizing the view that "Big Tech has run wild."
During his first presidency, Trump initiated landmark lawsuits against tech behemoths, including Google, resulting in a significant ruling that affirmed the company’s monopoly in search engine services. This push to dismantle monopolistic grips isn’t likely to relent, especially with the DOJ considering drastic measures, including the potential breakup of Google, though any resolution to this saga may not emerge until 2025.
The Future of Antitrust Regulation
As the clock ticks down on Khan’s tenure, observers wonder who will ascend as the FTC’s next chair. This decision could represent a significant shift in regulatory philosophy. Potential frontrunners include Melissa Holyoak, Andrew Ferguson, and Mark Meador—individuals whose professional backgrounds suggest varying levels of aggressiveness toward Big Tech acquisitions.
The consensus among experts indicates that whoever follows Khan is unlikely to share her philosophy, as illustrated by the commentary from former FTC member and antitrust professor Robert Lande, who noted that the incoming chair may bear little resemblance to Khan’s principles.
Given the history of the FTC, there have been few times of "serious activism," with Khan’s era being one of the notable chapters. The fate of ongoing antitrust scrutiny and litigation against Big Tech will hinge largely on the combined operations of the FTC and the DOJ post-inauguration.
Conclusion
This regulatory climate can profoundly impact financial markets and investment strategies. Investors should keep a keen eye on how these agencies evolve and how their actions may shape not only the tech landscape but also broader market conditions. As the shifts in Washington continue, understanding the interplay between government regulation and corporate operations will be essential for anticipating future market movements.
Stay tuned for more insights as we unravel these critical developments shaping the financial horizon.